FAAC Report Indicates NNPCL Removed N13.7trn From FG's Account
- Funding the national budget has become more difficult as a result of the NNPC withholding N13.763 trillion in revenue from FG
- This amount, which covers the years 2012–2024, has had a significant impact on the Federation Account, according to a report
- The national oil firm reported transactions of N27.28 trillion as a balance payable from the sale of domestic crude expenditures during the period reviewed
CHECK OUT: Education is Your Right! Don’t Let Social Norms Hold You Back. Learn Online with LEGIT. Enroll Now!
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
A record N13.763 trillion in revenue has been withheld from the federal government by the Nigerian National Petroleum Company Limited, making it more difficult to finance the national budget.
Source: Getty Images
The Punch reported that this was based on records obtained from the Federal Accounts Allocation Committee after its meeting on Wednesday, January 19, 2025.
The Federation Account, the primary funding source for distributing resources to federal, state, and municipal governments nationwide, was significantly impacted by this sum, which covered the years 2012–2024.
The rising discrepancy between the amount placed into the Federation Account and what the NNPCL should have remitted was disclosed in the paperwork filed with the Federation Accounts department.
It stated that during the review period, the national oil company disclosed transactions totalling N27.28 trillion as a balance payable from the sale of domestic crude expenses.
However, only N13.524 trillion was sent to the Federation Account, resulting in a substantial N13.763 trillion gap and increasing the government's financial burden.
The investigation also pointed out that N4.026 trillion was included in the list of certified subsidy requests, which has long been a problem for the nation's oil industry.
It further noted that the national oil company's financial management, accountability, and transparency were seriously called into question by the withheld revenue.
NNPCL accused of embezzlement
The Federation's Auditor-General accused the NNPCL of embezzling a total of N2.68 trillion and $9.77 million during the previous four years.
In its annual financial statements reports from 2017 to 2021, the office revealed that N1.33 trillion was diverted in 2017, N681.02 billion in 2019, N151.12 billion ($19.77 million) in 2020, and N514 billion in 2021, totalling N2.68 trillion and $19.77 million throughout the four years.
The Senate decided on Tuesday, January 18, 2025, to look into the company's alleged N8.4 trillion in withholding expenses for petroleum product subsidies.
Additionally, the Nigerian National Petroleum Company Limited and oil businesses owed the Federation Account $1.6 billion in royalties, which prompted the House of Representatives Public Accounts Committee to launch an investigation into the matter.
More charges against NNPCL
The NNPCL was also charged in a different study by the Nigeria Extractive Industry Transparency Initiative with not paying N3.6 trillion in taxes to the government.
According to an analysis of the FAAC document by year, the company paid N1.54 trillion to the federation account in 2012 instead of N1.42 trillion.
Read also
Nigerians rush to First Bank, Access, others to activate accounts as dormant users increase
About N1.043 trillion was not remitted in 2013, despite N1.58 trillion being paid to the federation account. In 2014, N1.17 trillion was withheld from the federation account, while N1.359 trillion was transferred.
The document further stated that N768.94bn was paid to government coffers in 2015 but N586.06bn was withheld. The amount unremitted dropped to N183.58bn in 2016 and N1.18tn was paid to government coffers for disbursement to the three tiers of government.
After deducting a substantial N430.62 billion from its profits in 2017, the company sent N1.305 trillion to the government. This trend laid the groundwork for a recurrent practice of withholding varied amounts—sometimes large—while continuing to make sizable payments to the federal government.
The amount withheld increased to N811.22 billion by 2018, yet the NNPCL gave the government an even amount of N1.48 trillion. With N703.45 billion withheld in 2019, the year-over-year trend peaked, but the company was still able to transfer N1.44 trillion to the federation account.
However, the sums withheld started to rise more sharply as the years went by. The amount withheld in 2020 was N298.06 billion, which was comparatively less than in prior years.
Source: Getty Images
Nevertheless, the paid sum remained at N1.21 trillion, demonstrating the company's capacity to make payments in spite of certain internal difficulties. A startling N1.94 trillion was withheld in 2021, which made matters worse. The government was ultimately paid just N789.03 billion.
The NNPCL then withheld an enormous N4.16 trillion in 2022, a sum that was significantly more than anything observed in prior years. Additionally, the total amount given to the government fell precipitously to just N245.83 billion, indicating a serious shortage.
The company withheld a total of N256.27 billion in 2024 after paying N190.48 billion into the federation account.
Analysts have raised concerns about the potential repercussions on state and local government budgets, as well as the federal government's ability to meet its fiscal commitments.
Kyari reassures Nigerians on fuel quality at NNPC stations
Legit.ng earlier reported that Mele Kyari, the group chief executive officer of NNPCL dismissed reports about sub-standard Premium Motor Spirit (PMS), also known as petrol, in the country.
Kyari told journalists during the 60th Nigeria Mining & Geosciences Society (NMGS) conference in Abuja that the reports of substandard petrol were unfortunate drama and bad marketing practices.
He stressed that NNPC and the country at large do not have any issues with petrol quality.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Source: Legit.ng
